Titan Football Manufacturing had the following operating results for 2014: sales

Question

Titan Football Manufacturing had the following operating results for 2014: sales = $19,930; cost of goods sold $13,830; depreciation expense $2,220; interest expense $270; dividends paid $700. At the beginning of the year, net fixed assets were $21,300, current assets were $3,090, and current liabilities were $1,920. At the end of the year, net fixed assets were $25,340, current assets were $3,580, and current liabilities were $2,010. The tax rate for 2014 was 35 percent. (Enter your answers as directed, but do not round intermediate calculations.) Requirement 1: What is net income for 20147 (Round your answer to the nearest whole dollar amount (e.g, 32).) Net income Requirement 2: What is the operating cash flow during 2014? (Round your answer to the nearest whole dollar amount Operating cash flow What is the cash flow from assets during 2014? (Negative amount should be indicated by a minus sign. Round your answer to the nearest whole dollar amount (e.g., 32).) Cash flow from assets Assume no new debt was issued during the year. (a) What is the cash flow to creditors during 2014? (Round your answer to the nearest whole dollar amount (e.g., 32).) Cash flow to creditors What is the cash flow to stockholders during 20147 (Negative amount should be indicated by a (b) minus sign. Round your answer to the nearest whole dollar amount (e.g. 32)-) Cash flow to stockholders

Explanation / Answer

1. INCOME STATEMENT

2). OCF = EBIT + Depreciation - Taxes

= $3,880 + $2,220 - $1,263 = $4,837

3). Change in NWC = NWCend– NWCbeg

Change in NWC = (CAend– CLend) – (CAbeg– CLbeg)

Change in NWC = ($3,580 – 2,010) – ($3,090 – 1,920)

Change in NWC = $400

Net capital spending = NFAend - NFAbeg + Depreciation

Net capital spending = $25,340 - $21,300 + $2,220 = $6,260

Cash flow from assets = OCF – Change in NWC – Net capital spending

Cash flow from assets = $4,837 - $400 - $6,260 = -$1,823

4a). Cash flow to creditors = Interest – Net new long-term debt

= $270 - $0 = $270

4b). Cash flow to stockholders = Dividends – Net new equity

Cash flow to stockholders = $700 - $0 = $700

Sales $19,930 Costs of goods sold 13,830 Depreciation 2,220 EBIT $ 3,880 Interest 270 Taxable Income $ 3,610 Taxes(35%) 1,263 Net Income $ 2,347

Related Questions

Navigate

• Browse (All)
• Browse T
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.